Orgenesis Inc.

Ladies and gentlemen, we will be getting started shortly. Please stay on the line. We will be getting started shortly. Thank you. Thank you. Good day, ladies and gentlemen, and welcome to the Orogenesis second quarter 2021 business update call. All lines have been placed on a listen-only mode, and the floor will be open for your questions and comments following the presentation. If you should require assistance throughout the conference, please press star zero on your telephone keypad to reach a live operator. At this time, it is my pleasure to turn the floor over to your host, David Waldman, Investor Relations. Sir, the floor is yours. Please stand by for David Waldman. Okay, David, you're on the air. I'm sorry about that.

Yep. Can everybody hear me? Yes. Great. All right. Thank you, and good morning, everyone, and welcome to our Genesis second quarter 2021 business update conference call. On the call with us this morning are Varad Kaplan, Chief Executive Officer, and Neil Reitinger, Chief Financial Officer. about the company, please contact Crescendo Communications at 212-671-1020. The conference call contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities and Exchange Act of 1934 as amended. These forward-looking statements involve substantial uncertainties and risks and are based upon our current expectations, estimates, and projections, and reflects our beliefs and assumptions based upon information available to us at the date of this conference call. We caution listeners that forward-looking statements are predictions based on our current expectations about future events. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions that are difficult to predict. Our actual results, performance, or achievements could differ materially from those expressed or implied by the forward-looking statement as a result of a number of factors, including but not limited to the risks and uncertainties discussed under the heading Risk Factors in Item 1A of our annual report on Form 10-K for the fiscal year ended December 31, 2020, and in other filings with the Securities and Exchange Commission. We undertake no obligation to revise or update any forward-looking statement for any reason. I'd now like to turn the call over to Orogenesis' CEO, Ms. Varad Kaplan. Please go ahead, Varad.

Thank you, David, and thanks for taking care of the technical problems, and thanks to everyone for joining us on our call today. I'm pleased to report we've achieved over a six-fold increase in revenue from the second quarter of 2021 compared to the second quarter of 2020. We believe this reflects both the progress and the sustainability of our point-of-care strategy, and I'll talk more about this in a moment. But let me first take a minute to discuss and remind you all about our point-of-care strategy, which we believe is the key to unlocking the full potential of the cell and gene therapy industry. As I've stated in the past, our business is built around three key pillars, our point-of-care therapeutics, our point-of-care technologies, and our point-of-care network. Each of these components aligns the interests of the therapy developers, the hospitals, the patients, and the companies in a way we believe has not been done before. We are rapidly gaining traction with our point-of-care platform by adding new point-of-care therapies and technologies, as well as expanding our global network through collaborations with research centers, hospitals, and biotech companies around the world. Currently, most cell and gene therapies are manufactured using a centralized production, either through in-house production or through the services of CDMOs, contract manufacturers, which is standard across the biotech industry. Centralized production has its limits. It requires massive capital investments. It is very expensive to operate and can take years to bring production online at meaningful scales. At the same time, with the explosive growth of the cell and gene therapy market, the industry faces major bottlenecks and capacity shortages at the CDMOs, internal manufacturing, and logistic problems, reflecting the cost and manufacturing delays of these therapies. Neither of these options, either internal or using a centralized CDMO, are cost-effective or sustainable as the industry continues to grow. A good example of this is the CAR-T therapies, which have faced supply chain issues and can range in cost in the hundreds of thousands of dollars per patient with rising resistance from payers. As both clinicians and patients grow more aware of these new treatment modalities, demand grows, but the industry lacks the capability to ramp up to meet demand. Some biotech companies are trying to build up internal capacity to meet growing demands, but this is a lengthy process. Even if the required manufacturing know-how is in place, setting up GMP facilities based on clean rooms, training new employees, and putting in place the required quality systems are extremely lengthy processes. It may take years. Some hospitals are trying to solve the supply and cost issues by manufacturing their therapies in-house. This is also far from simple. Hospitals are set up for treatment of patients and in some cases for research, but GMP manufacturing is typically a biotech soul. Most hospitals lack the required infrastructure, not only the clean rooms, but the entire quality assurance and supply network required for complex drug production. Innovation is springing up all around and trying to solve these problems. Many engineering companies are trying to develop closed automated systems that will allow simplified manufacturing of these therapies. This is a great step forward, and we as a company collaborate with many of these innovators, integrating their innovation into our platform. But having the proper equipment to manufacture on-site is just one piece of a much more complex puzzle. In order to enable decentralized supply of cell and gene therapies, Much more is required. The key factor is standardization, so that no matter at which site the product is produced, it's exactly the same process. To enable such standardization, several factors are required, and these factors are the foundations of the Regenesis point-of-care platform. A harmonized quality system, well-established training protocols, audited and consistent suppliers and vendors of materials involved in the production, and consistent quality control, validated automated solutions that minimize human error, and closed units to control infections. No less important is also a consistent manufacturing environment. One of the reasons we like to use our arm pools, our mobile units, this ensures we are always duplicating the exact same environment no matter where we manufacture. We believe our strategy of decentralized supply of cell and gene therapies based on standardization of the manufacturing environment, will ultimately become the solution for this industry, enabling lower cost, accelerated development, and ultimately provide a scalable long-term option to overcome the industry-wide capacity constraints. And while the rollout of our decentralized point-of-care strategies in the early stages, once the foundations are well established, it is much quicker and lower cost to expand capacity and increase rollout. Once we have validated a production process in one arm pool at one point of care location, we can add additional arm pools under the same quality system and infrastructure. We continue to strengthen the foundations of our point of care network via new joint ventures, partnerships with leading hospitals and research institutes across North America, Europe, Asia, and the Middle East, and are investing our efforts in validating our point of care platform within each region. Most recently, I'm pleased to report we entered into an agreement with a local partner to expand our point-of-care network in Australia. We are also seeing growing government interest in our JV partners and have identified a number of potential opportunities for government grants and other supports. Each of our partners have aligned interest with our own and have committed to support the validation, development, and clinical trials of advanced therapies utilizing our point-of-care platform. within their respective markets. As we have discussed in the past, we grant our partners geographic supply rights in exchange for future royalties and revenue-share agreements. World Biogenesis provides ongoing support for the operations and deployment of the target therapies. We believe this approach is highly scalable as it de-risks development through outside support from our partners. If you look at our revenue growth for the quarter, this reflects the first phase of our validation stage, of our rollout. Specifically, we are providing our partners and the hospitals we work with directly with technical, regulatory, and clinical support to establish our operations under long-term contracts. As we move into commercialization phase within respective point-of-care centers and potentially launch new therapies, we expect to benefit from revenue sharing and royalty agreements. Once in the commercial phase, we expect that our partners will be in a position to add additional sites and ramp up capacity very quickly to meet the needs of customers in their territories. Another example of the growth in our point-of-care network is in the U.S., where in most cases we work directly with the centers and are expanding our collaboration with a number of leading global healthcare institutes, such as Johns Hopkins University, where we are establishing a point-of-care development center, similar collaboration with UC Davis in California. We could not be more excited about these partnerships and the support we have received from both JHU and UC Davis. We have added additional validation sites across the US. In fact, we recently began setting up an additional center in the Boston area, which will help expand our presence in the Northeast and expand our capacity. Together with our partners, we now have a number of sites across Europe and other territories around the world including Italy, Spain, the Netherlands, Greece, and more. Our most recent addition was the Premier Center in Lithuania. Clearly, our business model is taking hold, and we are doing our utmost to provide all the support each point-of-care region requires. Our goal at the moment is not to add on as many sites as possible, but rather choose the optimal sites for validation of our point-of-care platform. Once we have received the required approvals, we believe we can quickly expand capacity with the support of our JV partners. Also, keep in mind, we and our partners sold MasterCell not long ago for approximately $300 million, when our revenues of MasterCell were roughly $30 million. And although MasterCell was a cutting-edge CDMO, we still faced the same industry challenges as other CDMOs, utilizing a centralized approach. In contrast, our annualized revenues based on our initial partnering programs are already nearing master sales at the point we sold it, reflecting the quick capacity buildup that the decentralized point-of-care approach enables and the foundations we are solidly building up for future ramp-up. Turning now for a moment to our point-of-care technologies. We have been very active, adding a number of highly advanced automated technologies into our platform. As an example, we have commenced enrollment for a Phase II clinical trial using the tissue genesis isolator at the Hospital of Special Surgery in New York. The tissue genesis isolator is designed for the use of point-of-care and is a practical and cost-effective solution for clinical applications of stomal and vascular cells from autologous adipose or fat tissue. We are also advancing our point-of-care therapies, which now span immune oncology, antiviral therapies, metabolic autoimmune diseases, tissue regeneration, and more. Our strategy involves in-licensing therapies from leading research centers, hospitals, and biotech companies, taking on the responsibility of industrializing and supplying these cell and gene therapies in a consistent and standardized manner in all locations. Orgenesis research and development teams have been working closely with our global partners in academia and industry partners, collaboratively progressing towards the goal of enabling the research discoveries to become clinical-grade therapeutics. At the heart of our business model is our goal to make these therapies available to a large number of patients at reduced cost. So on-site processing of our therapies using the point-of-care model. which we believe will support payer uptake. Unlike a traditional biotech with a handful of therapies in the pipeline, we continue to evaluate new therapies at all stages of development through our growing partnership with researchers, commercial entities, and hospitals. We have built a robust therapeutic pipeline, which includes more than 30 advanced cell and potential gene therapies, and we continue to evaluate new therapies every day. More recently, in June 2021, we achieved the multiple Ampirinaz development milestones based on the Ogenesis acquisition of the Tamir biotechnology assets last year. Ogenesis has completed its pre-IND cancellation with the U.S. FDA regarding the development of Orantoc, a topical gel formulation for Ampirinaz for the treatment of anogenital warts. We are on track to start phase 2 trials in this indication after completing the FDA pre-IND request. We have recently announced that our licensing partner, Ocogen, presented positive interim phase 2 clinical design results for OKG0301, an ocular formulation of RAN-Pirinaz in acute adenoviral congenitivitis. This research provides encouraging scientific validation for continued development of RAN-Pirinaz in ophthalmotic indications. Ocrogen plans to progress to a Phase III trial and has presented its plans to the FDA. Regarding our collaboration with LADIS, we are preparing additional materials that we believe to lead to an IMD submission for a clinical trial for Rampirinaz for the systematic treatments of patients infected with COVID-19. We are also planning to test Rampirinaz against other potential target infections, which are high on the U.S. National Institute of Allergy and Infectious Diseases emerging infectious and pathogens list, including Ebola and eastern equine encephalitis virus. Lastly, we have begun feasibility studies to combine Ranpirinase with eugenesis bioxome technology. Bioxomes are extracellular vesicles that we believe can provide some therapeutic benefit of cells without the difficulty of administering the entire cell to the patient. This reformulation of Ranpirinase may enhance delivery of the antiviral activity of Ramparinaz without increasing the risk to the patient. This is just one example of what we're planning to leverage our bioxome technology across our platform. In addition to the therapeutic programs I mentioned, we're also engaging in numerous additional collaborations to advance our pipeline, including collaborations around the development of new manufacturing methods for tumor-infiltrating lymphocytes and CAR-T and NK-based therapies. In addition to our technical and manufacturing expertise, we also provide our therapeutic development partners with extensive support for quality assurance, regulatory and clinical development, utilizing our internal expertise with the aim of accelerating the development and commercialization pathway. So to wrap up, I remain as encouraged as ever by the outlook for the business and believe we are building a sustainable revenue model that will allow us to support our global partners while they're advance our products through the required regulatory steps. We have invested to expand our capabilities and recruited some of the top industry experts to help us capitalize on this unique opportunity to potentially transform the cell and gene therapy market. We all share a combined vision of bringing breakthrough therapies to market in a cost-effective way that will ultimately benefit patients and save lives. I truly believe our revenue growth, coupled with our solid balance, And the fact that most of our heavy investments are behind us all bode extremely well for the future. On that note, I'll now turn the call over to Neil Isengard, Chief Financial Officer.